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The following article was published in our article directory on December 6, 2019.
Learn more about SpinDistribute Article Distribution System.
Article Category: Business
Author Name: Jason Cohen
While self-financing can be one of the most difficult ways to come up with start-up capital, it is also the least risky. Think about it, if your business idea does not pan out, you will not be buried in debt, and collectors won't be hounding you every minute of every day.
Another great thing about self-financing your start-up is that there are many ways that you can go about it, for instance:
Tap Into Your Personal Savings
Dipping into your personal savings account is the easiest and most convenient way to come up with start-up capital for a small business. It does not matter if the money comes from your own checking account, inheritance from your family, or funds that are just lying in an old investment account, using your own assets is not just only the easiest way to gain funds for your start-up capital, it is also a great way to show potential investors that you're committed to your business, which can really help secure additional funding later on when you need to.
Sell Off Your Personal Assets
Selling one's belongings to fund a business is probably one of the oldest forms of self-financing. You can sell anything that you own that you think has value; like real estate property, stocks and bonds, or if you have any valuable family belongings that you are willing to part with. However, you need to take into account that there might be some tax implications when selling certain assets, like real estate property and stocks.
Take On A Side Gig
You can start a side gig if you have some spare/ time in your day so you can have additional savings that you can use for your start-up capital. For instance, if you have a car, you can sign up with Uber and take a couple of passengers every evening after work. Or you can go online and take jobs on websites like Fiverr or Upwork, you can use your particular set of skills to help other people. Don't expect to earn enough money ; from your side gig right away, but it will add up over time.
Cash in Retirement Accounts
Although it can be tempting to just withdraw the funds from your IRA or 401k, do take note that there are steep penalties for early withdrawals. However, there is a way that financial advisors are promoting that allows entrepreneurs who are planning to launch a new business to avoid said penalties.
Supposedly, you can roll over funds from an existing 401k plan into a new one made by a C corporation. The new company's owner could then invest the 401k funds into company stock, this will supposedly free up the money so you can use it to finance your start-up.
Though it will take a bit of sacrifice in your part, but trust me, it will all be worth it in the end. If your business booms, you will not have to share the profits with anyone else; and in the off-chance that it tanks, you will not be held liable by anyone else but yourself.
If you can manage to do so, try to self-finance your start-up capital first before trying other means.
Keywords: Small business loans, Business services, Start-up capital, inventory capital, seasonal emploee funding
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